How Will SeaWorld (SEAS) Stock React To This Decision To Expand Orca Habitats?

SeaWorld is reported to be expanding its orca tanks at three of its parks as a result of media attention and disappointing second quarter earnings.

NEW YORK (TheStreet) -- SeaWorld Entertainment Inc. (SEAS) is planning to announce Friday its intentions to expand the habitats of its killer whales at three of its amusement parks, beginning in San Diego, the Wall Street Journal reports.

SeaWorld stock began to decline dramatically on Wednesday after the company released disappointing second-quarter earnings. The company admitted that negative media attention regarding legislation over captive killer whales in California led to a decline in attendance for the quarter.

The company has been in the midst of a controversy surrounding the treatment of its killer whales since the 2013 release of the documentary “Blackfish,” which questioned the ethics of keeping large marine mammals in captivity and accused SeaWorld of mistreating its animals.

The killer whale tank in San Diego will double in size to hold almost 10 million gallons of water and reaching a depth of 50 feet, according to the Journal. Similar upgrades are also planned for the parks in Orlando and San Antonio.

The upgrades will begin in San Diego in 2015 and finish by 2018. The company did not give an exact amount regarding the cost of the expansion but told the Journal it would be several hundred million dollars.

Shares of SeaWorld are up 0.56% to $18.10 in pre-market trading today.

Separately, TheStreet Ratings team rates SEAWORLD ENTERTAINMENT INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate SEAWORLD ENTERTAINMENT INC (SEAS) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself."